Climate Action News

One-on-one with Fabrice Grinda

March 24, 2021 wedonthavetime.org Season 2 Episode 2
One-on-one with Fabrice Grinda
Climate Action News
Transcript
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Welcome to Climate Action News, one on one, brought to you by we don't have time. My name is Catarina Rolfsdotter-Jansson and I am the host of this new series focusing on investors and entrepreneurs and partners supporting we don't have time. And with us in this first episode, we have Fabrice Grinda, who is the number one angel investor. And also he is an introvert internet entrepreneur of a really, really high status in the world. So before I start this interview with with Fabrice, I'd like to introduce this counter, which is a constant reminder of the fact that we really don't have much time. We don't really have any time to act, this counter counts down to 2030, where we need to get really, really low on the carbon emissions in the world. So let's now turn to an introduction of Fabrice grinda. Meet Fabrice grinda is among the world's leading internet entrepreneurs and investors with over 600 angel investments and 175 exits. Fabrice has served as CEO for three multinational companies, and has an impressive track record as an early investor in Alibaba. flexport deliver hero betterment and bright room for Reese is currently running the startup studio and venture fund fJ labs, which he co founded with business partner Jose Marine, Fabrice was named the number one angel investor in the world by Forbes. So hi, Fabrice grinda. Welcome to Climate Action News. a one on one. How are you today? doing very well. Thank you for having me. Excellent. Excellent. So you are one of the world's leading entrepreneurs and investors would you say? Which are the biggest challenges the world is facing when it comes to, to well, challenges in the world? And what can investors like you do to help solve these major challenges? So my entire life both as an intrapreneur. And as an investor, I've been mission driven. And to me in the 21st century, there are two fundamental issues of our time that we're facing. On the one hand, there's social injustice and equality. And on the other hand, there's climate change, and from my perspective, seeing how broken the political processes are, and happen, and it feels like actually, the way to address these issues is through technology, we can harness the deflationary power of technology and its ability to improve user experiences, to frankly address the two defining challenges of our time. Of course, we don't have time focusing on the latter in the climate crisis. And Fabrice, thank you. You've run the the fg fg labs. It's a studio and startup studio and venture capacity, what is your major focus? So it's exactly those two folks. So we mostly invested in marketplaces, because marketplaces are reasonably capital efficient, they can scale to very large scales and the their deflation in by virtue of being deflationary, they make things cheaper, which improves people's purchasing power, and or in the case of the climate crisis allows the alternative the alternative energy to breach the point where red grid parity or below and therefore, the accelerates the transition to carbon neutrality. In the coming decade. As you have invested in we don't have time, why is that? I invested in we don't have time, because actually agree, we don't have time. If you look at the data, over the last 40 years of being the man of heat we've been releasing in the oceans or over the last 25 years is the equivalent of detonating five Hiroshima sized nuclear bombs every second for 25 years. I mean, that's insane. if aliens arrives, or you can use five nukes a second, we'd stop everything to deal with it. But because we see it as unstoppable or natural, we haven't really addressed it. At the same time we have a million species at risk of extinction because climate change the 21 of the warmest 20 years on record have happened the last 21 years. Actually the opposite 2020 of the warmest 21 years of record on record of half of the last 21 years and that we really don't have time and and as such, given the our underlying mission of using technology to make the world a better place decided getting the message out there making sure that both capital and intrapreneurs and or allocating of time to dressing one of those two fundamental issues of our time made a lot of sense. So far, Bruce, how did your interest your your concern about Climate come about? You know, hey, look, I think at the end of day two, I'm more I put myself in the shoes of the consumer and and it's clear observation, right as, as we grow rise of Asia over time realise, you know that when Drew's becoming shorter that climate events are becoming stronger, we're with way more extreme weather patterns and way more diversity than ever before. And observing that the world is changing, you know, for for the worst. While I do think in the long run, it would be great when we become a multiplanetary species, we do have an amazing planet that has been our hosts for many years, and we have not done a good job at protecting it. And it's time to change that. For sure. We have not done a good job, I totally agree with you. When it comes to companies doing a good job, I mean, us as an investor, could you rank, maybe the top three for most companies that hosts the capacity of solving the major challenges related to climate change? Well, first of all, I want to talk about specific companies, let's talk about more than mega trends that I think we're helping. And the one thing that's helping is really the decrease in the cost of solar, solar is decrease in cost by 90%. Over the last decade, and another 90%, that that came before that. So we have 100x decrease in 20 years in the cost of solar to the point now, where it is the cheapest form of energy production at scale, in most places. Now, we don't have yet a storage, but even lithium ion batteries prices have declined at 5% in the last decade. And as they're continuing to decline, and we expect them to continue to decline in the next decade, we're going to get to the point where solar plus storage will be cheaper, frankly, than the cost of maintaining your grid. So it's going to lead to massive increases in distributed solar. So it won't be a solution for the major cities will be solution for houses that are detached and, and for commercial operations that are not in major cities. And it's really starting to happen, especially in places like Indonesia, or Malaysia where the grids are unreliable and expensive, but will happen in the US and frankly, most of the West in outside of major cities, and then that's five to 10 years. And for the main cities, they're really interesting things that are starting to happen, again, driven by solar, I mean, if you things like energy volt, it's a gravity based massive battery that could actually provide storage for the coolest city. So it would allow solar to become a viable option for for cities as well. And other companies like religion on the manufacturing side that can address the 20% of emissions that are coming, that are coming from for manufacturing. So these are major trends. Do you would you say that this is happening fast enough? Or what do we need to speed up this transition. So on the solar side is happening quickly and probably ever quicker, because you're getting cheaper and humans can be counted on doing the right thing once they have been senate when it's in their economic incentive to do it. So once it's the cheapest form of energy production, people will migrate to it automatically. That said, there are a lot of things we could do to improve it. I mean, the the grids we have are not really well designed for handling a lot of a lot of solar. And often we're still subsidising carbon in many places, and we have like fuel subsidies in many places around the world, it would help if to make it more committed solar will become the cheapest form super soon, but what could make it happen sooner would be a global carbon tax, for instance, because then the we would be facing the marginal social costs of consuming of using fuels that create carbon as opposed to purely the marginal private cost, which in a way under prices, the cost of fuel and, and coal and natural gas and, and gasoline. So there are a lot of things at the policy level that can be done. But then at the tech level, there's a there's a lot of if more, you know that there's a saying, which is the greatest minds of our minds of our generation have been allocating their time to solving how to sell ads, you know, an improving cost per click by working at Facebook or Google. And if instead of like allocating the very best minds of our generation, to doing things like that, they actually were allocating themselves to direct train solve the climate crisis, I think we can move the needle and that's why now I'm very optimistic because it used to be to build a startup in their renewables energy space, you needed 10s of millions dollars or hundreds of millions of dollars before you could turn the lights on. And that's changing. And the reason is more than that it changes is the venture ecosystem doesn't really work that way. It's a you get it mentally. to pre seed money, 3 million of seed money, 7 million of a. And so because the funding cycle is such and the fact that more and more things are becoming software, I suppose hardware is helping to make a difference. And so we're already seeing a now in in our portfolio, I mean, now we're investors and companies like leap.ac, which is like a grid edge management solution, where investors and companies like neutral and neutral is a animal feed supplements that decreases the the methane emissions from cows, by 30. And it's given away for free to the agricultural companies, and it's paid for and carbon credits. And so there's still a lot, there's a lot of innovation happening, a lot more needs to be done. And especially on the food side, because the one thing where we're going in the wrong direction, because solar in a way, they will address the energy production, and in the coming decade reasonably quickly. But as people were making becoming wealthier, they're consuming more meat. And as a result, the methane emissions from from agriculture's are increasing, they're ready 25% of the emissions. And so that one, true transitioning to lab grown meat faster is important. But there's a lot of interesting developments here as well. I mean, obviously, we're invested in a company called Artemis and the lagering, meatspace. There's companies like insect to feed insect feeds to the animals, so they don't consume things that create a carbon. So there's a lot of interesting innovation, but a lot more needs to be done and can be done. So for Bruce, when you look at your life as an investor, now, when a lot of what you do is very purpose driven, in terms of you creating solutions to save humanity, basically, what is it? What is it like to be an investor investing like this, and but this focus, compared to, let's say, 15 years ago, to be honest, I've always been purpose driven, it's just the most of what I focus on was more social injustice, inequality, because technology by being cheaper, allowed people to improve the customer, their, their, their, their main purchasing power, and their standard of living. And also because on average, there's less discrimination technology, it would aid become more accessible, and, and, and be lead to better outcomes. And, and that was really the main focus for 15 years, but it was still purpose driven back then I do think, and the reason I, you know, I do a lot in the non for profit sector sector. But you know, when I pay for the education of 10,000, kids, K through 12, that's great for these 10,000 kids, but it's not a scalable solution at the level of a planet. Whereas what we do, and what I do in the investing side of the entrepreneurial side, which is in the for profit sector is scalable. And be because it's it's self financial, actually has the scale to change the lives of billions of people. And so the purpose is a remain, it remains purpose remove always been purpose driven, it's just that I've added a new leg of climate that I was in focused on, particularly 15 years ago, 20 years ago, it didn't feel that there was as much of an imperative urgency, which has become very, very clear today. Thank you. And speaking of clear and scaling, when you will look at the climate review and the climate dialogue aspects of we don't have time, speeding up transition, and also making it easier and clearer for companies to to, to move towards some more climate friendly future. What How important is this, this transparency and this dialogue that's going on on the we don't have time platform, it's very important, because the easiest way to move the needle, by the way is to make change the behaviour of people at scale, right? If Amazon decides that they're only going to do use renewable packaging, which I think they did decide or improve their supply chain to have less carbon, because they're ready at scale, or Walmart, this is the same thing. It has a massive immediate impact, much more so than, frankly, our behaviour change. I mean, US changing going from plastic straws to metal straws or whatever, actually, in the grand scheme of things is very marginal impact. But actually moving the needle in the behaviour of corporate joins, actually has a much larger impact. And so pushing it to the limelight and highlighting the efforts made by many, and perhaps in the other in the other direction. criticising those that are not moving the right direction, I think is actually very helpful. How about consumer impact on decision makers, like governments, for instance, how important is the the grassroot the power of the many that we actually see great examples on all the we don't have platform in terms of changing you mentioned policies before? What impact can have the regular guy using the platform have on on policies when when there are many people pushing? I think at the end of the day, when there starts to be a consensus in the consumer mind. You know, Paul, policymakers and I think politicians have tendency to be reactive that they're rather than proactive. So once all of their constituents say we need something in the climate side, the it does happen and the consensus is starting to be reached. I mean, I wouldn't be surprised if we have a new Green Deal of some sort in the US in the next four years, given the current administration. And, and, and having the platform to push in that direction, I think, is great. So looking ahead, five years from now, for breeze, what do you see in terms of, of, of your horror of rice on as an as an entrepreneur and an angel investor. So today, in a way that climate lag is something new, and in our portfolio, I mean, last year, we made 146 investments. And I think like 10 of them had a climate focus. And I suspect that when we revisit and relook at it, five years in the future, that will, that mix will increase dramatically, and there'll be many more and the common sight. So I started pointing at this, this counter here, counting down to 2030. And saying, of course, that we don't have time, and you agreed, the responsibility of investors. Few of them have the impact that you have, of course, but what what what takeaways Can you give them in terms of, you know, the importance of pulling their weight? in reaching me it's, yeah, it's time. There are many things you can invest in, and some seem more trivial than others and and think through what is the ultimate purpose that we that we are here for and, and being purpose driven and trying to do things and find solutions that make the world a better place makes a lot of sense. And, and I think in the next decade, if we rise up to the challenge, we can actually completely decarbonize or energy production, for the most part, like move to over 50% made by renewables, and especially solar, I suspect that within 510 years, we're going to be the decade for sure, maybe five years, because we won't underestimate the power of exponential growth, we're going to be able to move the entire electric or car to electric. And so there's a lot of opportunities that can be created by that. I mean, and so take advantage of these opportunities, invest ahead of time and invest to make the future we would like to all live in. Thank you for those wise final words. And thank you so much for for participating in this climate action us one on one bye, we don't have time. Thank you very much for having me. Thank you. And for all of you watching please download the the app take part in this movement in this climate action. And also by Danone, the app and becoming interactive here with us you don't miss out on the next episode of Climate Action News 101. Thank you and see you on the next episode. Bye bye